Sensex falls as RBI cuts rate |
RBI`s rate cut of 0.25% was not cheered by Indian stock market as doubts and concerns about the economic growth crept in. The benchmark Sensex fell 1.38%, or 553.82 points, to close at 39,529.72. The yield on 10-year bonds fell nine basis points, an 18-month low, of 6.933% from its Tuesday`s close of 7.02%. Bond prices and yields move in opposite direction. The rupee closed flat to 69.28 to the dollar, up 0.03% from its previous close. Though the market is sceptical, Expectations are that banks will pass on the rate cut by lowering their lending rates and in turn possibly lowering the equated monthly instalments (EMI) that individuals pay on home and consumer loans. RBI`s rate cut also sets the tone for the Union Budget next month, adding that the latter is expected to be growth-oriented.
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